Cost Optimisation through Modified Vogel’s Approximation Method for Unbalanced Transportation Problem

For any manufacturing firm, transportation cost could be a considerable part of the logistics cost. This along with the mounting fuel cost is ultimately passed on to the customers. With rising competition, firms are forced to find out methods of optimising the transportation cost thereby reducing the total cost. There are many methods available in solving a transportation method. However, the traditional Vogel’s approximation method has many drawbacks when dealing with situations where the supply and demand are unbalanced. This study examines the effectiveness of using the modified Vogel’s method when compared to the traditional approach with the help of a case study. The study found that the use of the proposed method will bring in considerable cost reduction in transportation thereby increasing the profitability of the firm. Moreover the proposed method is easy to implement and will be highly beneficial for the decision makers.